Overhauling Milk Pricing Regulations: Federal Hearings Loom as Dairy Industry Pushes for Changes

Jun 20, 2023

Federal regulators are poised to initiate hearings on August 23 to review and potentially revamp milk pricing regulations. In an online informational meeting held on June 16, officials from the Federal Milk Marketing Order listened to proposals from various stakeholders, including the National Milk Producers Federation and the American Farm Bureau Federation.

However, the meeting primarily focused on technical questions from USDA staff, with the petitioners unable to provide full justifications for their plans.

June 20 was the deadline for petitioners to submit revisions to their proposals. Following this, the USDA will announce in late July whether a hearing will be held. If approved, the hearing is scheduled to commence a month later in Indianapolis, allowing organizations to present their rationales for the proposed changes.

Key modifications advocated by dairy groups include increasing the make allowance, which assists manufacturers in covering their expenses, and reverting to the higher-of formula for pricing fluid dairy products. The higher-of method was replaced in the 2018 Farm Bill with an averaging formula, which inadvertently led to negative producer price differentials and reduced earnings for farmers in 2020 and 2021.

The upcoming hearings mark a significant juncture in the dairy industry, as stakeholders strive to address the shortcomings of the current pricing system and advocate for revisions that better support producers. The outcome of these proceedings could potentially reshape milk pricing regulations and impact the financial well-being of dairy farmers nationwide.